WPD has agreed to reduce the funds it collects from customers by £77 million, because of delays to rail electrification in its region.
The electricity distribution network operator (DNO) was to use funding of £96 million to divert power lines to allow for electrification in two of the areas it covers, the midlands and Wales. But the government announced in 2017 that it would scale back electrification plans. The £77 million represents capital expenditure that has not yet been made and is not required.
WPD has agreed the reduction with Ofgem, but only on condition that it is covered if there are other changes in policy. WPD agreed its funding with Ofgem before other networks, and before rail electrification was identified as an output for DNOs. It is now agreeing an uncertainty measure with the regulator similar to one that applies to other network companies.